WRAP UP

Tamar Hallerman
GHG Monitor
09/28/12

IN CONGRESS

The Senate cleared a stop-gap spending measure Sept. 22 that would fund the federal government for the next six months at an annualized rate of $1.047 trillion. The upper chamber passed the six-month Continuing Resolution, which cleared the House earlier this month, on a 62-30 vote just eight days before the end of FY2012. The measure will generally increase allocations for most discretionary programs by 0.6 percent above enacted FY2012 levels. Largely free of controversial amendments, the measure was part of a political deal meant to remove the pressure of a looming government shutdown from members eager to go to their home districts and campaign for reelection. Republicans had agreed to accept Democrats’ spending cap of $1.047 trillion—$19 billion above the figure proposed in the GOP’s budget blueprint—as part of a political gamble that the party will pick up Congressional seats, and potentially the White House, in the November elections, allowing for more leverage to push for deeper spending cuts next year. Senate Appropriations Committee Chairman Daniel Inouye (D-Hawaii) said he was not pleased with the idea of having to pass a CR. “I support this measure even though it is far from perfect. In fact, I would say that it is not a particularly good bill, but passing it is much better than allowing the government to shut down over a lack of funding,” he said in a floor speech late last week.

In its last move before the November elections, the House easily passed a package of coal-related measures Sept. 21 meant to voice disapproval over the Obama Administration’s energy policies. With the help of 19 Democrats, the lower chamber voted 233-175 to pass the “Stop the War on Coal Act,” a collection of previously-passed provisions that would, among other things, block the Environmental Protection Agency from regulating greenhouse gas emissions under the Clean Air Act and require an interagency committee to sign off on the cumulative economic impacts of all future EPA power sector regulations before promulgation. While the legislation has little likelihood of being taken up by the Democrat-controlled Senate, supporters said it sends a strong message to the Obama Administration before the election. “At a time of high unemployment rates, President Obama and his EPA should be working with coal states to create and retain jobs, rather than thwarting economic growth and causing miners to lose their jobs,” Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) said in a statement following the vote. Meanwhile, Democrats said Republicans are trying to give coal a free pass. “House Republicans appear to be in an intellectual fog when it comes to energy policy. I guess that’s why they can’t see the invisible hand of the free market moving America to clean energy and natural gas,” Rep. Ed Markey (D-Mass.) said in a statement.

Greenlighting a $20 per ton fee on CO2 emissions could slash the federal deficit by as much as 50 percent over the next decade, according to a report released this week by Congress’ nonpartisan research arm. Depending on the way a tax is modeled, the economy-wide fee could generate $88 billion for the government in 2012, an amount that could rise to $144 billion by 2020, the Congressional Research Service said in the report. Depending on how much government spending rises over the coming years, the tax could cut the nation’s deficit between 12 and 50 percent within the next 10 years, according to the CRS. “Economic studies indicate that using carbon tax revenues to offset reductions in existing taxes—labor, income and investment—could yield the greatest benefit to the economy overall,” the report says. However, CRS acknowledged that a carbon tax could also have some negative side effects, such as “disproportionate” costs on lower-income households, which could hurt from higher electricity bills. The idea of a carbon tax has resurfaced in earnest in Washington over the last several months as members of Congress have debated potential deficit reduction schemes.